The capitalization of energy labels into house prices. Evidence from Italy

Michele Loberto, Alessandro Mistretta and Matteo Spuri ()
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Matteo Spuri: Bank of Italy

No 818, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Mitigating the negative impact of climate change implies a drastic reduction in greenhouse gas emissions: moving towards the net-zero target requires, among other things, a dramatic improvement in the energy efficiency of residential buildings, which account for 12.5 per cent of greenhouse gas emissions in Italy. This paper estimates the extent to which energy efficiency labels are capitalized into house prices. We find that the most energy-efficient houses sell at a 25 per cent premium over the least efficient ones. Our contribution is relevant for two reasons. First, we provide granular estimates of the impact of energy labels on house prices in Italy and show that the energy efficiency premium is significantly heterogeneous across provinces due to differences in climate conditions and regulatory frameworks. Second, energy labels play a key role and are used as a benchmark for several policies, and the heterogeneity in the energy efficiency premium may call for more targeted public policies that promote investment in energy efficiency.

Keywords: housing; energy efficiency (search for similar items in EconPapers)
JEL-codes: O1 Q5 R3 (search for similar items in EconPapers)
Date: 2023-11
New Economics Papers: this item is included in nep-eec, nep-eff, nep-ene, nep-env and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_818_23

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